THE TORO COMPANY TAKES ADDITIONAL ACTIONS IN RESPONSE TO COVID-19 PANDEMIC
May 11, 2020
Source: The Toro Company news release
Bloomington, Minnesota -- The Toro Company today announced additional proactive actions it is taking to mitigate anticipated impacts of the COVID-19 pandemic on its business.
Richard M. Olson, The Toro Company's chairman and chief executive officer said, "With the continued proliferation of COVID-19, we remain first and foremost focused on the health, safety and well-being of our employees, customers and communities. I am inspired by the resilience, collaboration and passion of our team as we work through the unpredictability of this pandemic. The Toro Company has strong underlying fundamentals and is in a solid financial position. We have a stable balance sheet and sufficient liquidity. However, like many other companies that are navigating the uncertainty of this pandemic, particularly as it relates to its duration and scope, we have experienced production and supply chain disruptions and reduced demand in certain of our businesses. As such, it is prudent for us to take additional proactive actions now to help mitigate anticipated impacts of the COVID-19 pandemic on our business and financial performance. The additional actions we are taking today will enable us to effectively manage through this challenging environment with agility and position us well for the recovery."
The compensation of the company's senior leadership, including all executive officers, and the Board of Directors is adjusted as follows for the rest of fiscal 2020:
Salary for Richard M. Olson, chairman and CEO, is reduced by 30%. Additionally, Mr. Olson will make a voluntary personal donation to the Melrose/Hoffman Employee Critical Need Fund which was established in 2005 to help The Toro Company employees that are experiencing financial hardship;
Salaries for members of the executive leadership team are reduced by 20%;
Salaries for all other executive officers, general managers and certain other senior leaders, are reduced by 10%;
The Board of Directors will forgo the cash portion of their compensation and instead donate the pay to the Melrose/Hoffman Employee Critical Need Fund for the benefit of The Toro Company employees.
Additional measures the company is taking include:
Reducing salaries for U.S.-based exempt office employees by 3.5% and the workweek for U.S.-based nonexempt office employees to 37 hours per week, each for the rest of fiscal 2020. This is equivalent to a reduction that otherwise would have been realized through a five-day furlough;
Eliminating the 2020 discretionary investment fund contribution under the company's retirement plan that would be paid in 2021;
Eliminating additional broad-based fiscal 2020 merit increases;
Continuing a hiring freeze on most positions.
The company will continue to monitor the impact of COVID-19 and may adjust its action plans accordingly as the situation progresses. As disclosed previously, the company has already curtailed share repurchases for fiscal 2020 as it focuses on debt repayment.
As a reminder, on March 30, 2020, the company announced that it withdrew its fiscal 2020 second-quarter and full-year guidance. The company will provide additional business updates during its fiscal 2020 second-quarter earnings announcement and conference call that is expected to be held on June 4, 2020.